Requirements for posting workers to the Netherlands

What is a ‘posted worker’?
 
A ‘posted worker’ is sent by his employer to temporarily work in another country than where he normally works to carry out a contracted service (‘service provision’), work for an undertaking, belonging to the same group of undertakings as his employer (‘intra-company transfer’) or to be temporarily placed at a user undertaking via a placement agency (‘agency work’).
 
Posted workers might need work authorisation
 
In the Netherlands, companies receiving a posted worker who is not a citizen of the EU, EEA or Switzerland need to obtain work authorisation before the worker starts carrying out the work, unless a statutory exemption applies. If a worker needs to stay for less than 90 days in a 180 days’ time window, work authorisation is issued as a ‘work permit’, in paper format, confirming the name and address of the employer, place of work, type of work, working hours and (sometimes) salary. If he or she needs to stay longer, and must therefore apply for a residence permit, this permit covers work authorisation. Residence permits issued as a Single Permit under Directive 2011/98/EC come with an ‘additional document’, confirming the above-mentioned work permit details. Regarding posted workers, the most notable example of an exemption is work carried out to provide an intra-EU cross-border service. We commonly refer to this as the ‘Van der Elst’ exemption. Carrying out work under an exemption however often still requires the employer to report the work to the Labor Authority (‘UWV’) two days before the work commences and if the worker needs to stay for more than 90 days, he or she must apply for a residence permit.
 
Verification of identity and right to work checks
 
Companies posting a worker to a customer, user undertaking or other third-party employer must provide this receiving company with a copy of the worker’s ID and work authorisation document before the worker starts carrying out the work. The recipient must verify the workers identity and right to work by verifying the worker’s original ID vis-à-vis as well as by comparing the original ID with the received copy.
 
Employment conditions
 
On the level of the European Union, a number of Directives have been issued, requiring the Member States, to ensure equal treatment for posted workers regarding the terms and conditions of their employment while being posted.
 
In accordance with Directive 96/71/EC, workers that are posted within the EU are entitled to the terms and conditions of employment in the host Member State as far as these are covering the following matters and have been regulated by law, regulation, administrative provision or collective bargaining agreements that have been declared universally applicable:
 

• Maximum work periods and minimum rest periods.
• Minimum paid annual holidays.
• Minimum pay rates, including overtime rates (not including supplementary occupational retirement pension schemes).
• Conditions for agency work.
• Health, safety and hygiene at work.
• Terms and conditions of employment for pregnant women or women who have recently given birth, children and young people.
• Equality of treatment between men and women and other provisions on non-discrimination.

 
We commonly refer to these elements as the ‘hard core’ of employment law. In the Netherlands, these elements are regulated by the Minimum Wage and Minimum Holiday Allowance Act, the Working Hours Act, the Working Conditions Act, the Placement of Personnel by Intermediaries Act (Waadi) and the Equal Treatment Act.
 
The EC has submitted a proposal (COM(2016) 128) to amend Directive 96/71/EC to ensure fair pay and a level playing field between posting and local companies in the host country by requiring that remuneration of posted workers should not just be the legal minimum wage of the host Member State, but the remuneration that is generally paid to local workers in the same position. As such, remuneration will not only include the legal minimum wage rates of pay, but also other elements such as bonuses or allowances. Further, the amendment directive requires that, when the effective duration of a posting exceeds 12 months (or 18 months, if extended), posted workers are entitled to all the applicable terms and conditions of employment laid down in the host Member States’ laws, regulations, administrative provisions or collective bargaining agreements which have been declared universally applicable. This includes employee termination protection. The proposal for this amendment directive is still under consideration.
 
In accordance with article 18 of Directive 2014/66/EC, on intra-corporate transfers from third-countries into the EU, intra-company transferees, too, are entitled to the above-mentioned ‘hard core’ labour law terms and conditions, regardless of the law applicable to their employment relationship. In accordance with article 5 Directive 2008/104, agency workers will, for the duration of their assignment at the user undertaking, are entitled to enjoy the basic employment and working conditions equal to employees of that undertaking who are working in the same position. This covers the elements of the duration of working time, overtime, breaks, rest periods, night work, holidays and public holidays, pay, protection of pregnant women and nursing mothers and protection of children and young people; and equality of treatment between men and women and other provisions on non-discrimination
 
Pursuant to Directive 2014/67, employers and receiving undertakings must comply with a set of requirements, allowing the authorities of the Member States to check if the requirements, set by Directive 96/71 are met. In the Netherlands, these have been implemented in the Terms of Employment Posted Workers in the European Union Act (WagwEU). According to this act, employers must:
 

• provide information if requested by the Inspectorate SZW (the enforcer of social affairs and employment laws);
• keep records and documents, digitally or on paper, at the work location (employment contract, pay slips, summaries of working hours, proof of payment of social security contributions, proof of the identity of the service provider, the services recipient and the worker, proof of payment of salary);
• report the work in advance;
• appoint a contact person for the Inspectorate SZW.

 
The duty to report the work in advance will take effect as soon as the authorities have a digital report system available – we anticipate in 2019.
 
Mandatory registration for placement agencies (‘WAADI’)
 
Placement agencies (i.e. employment agencies, temporary work agencies payroll companies and job pools or any other undertakings engaged in making workers available to work under the supervision and direction of a user undertaking other than by an employment contract being concluded with the user undertaking) are prohibited to make workers available in the Netherlands without having properly registered this activity in the Trade Register of the Dutch Chamber of Commerce. This requirement is mandatory and equally applies to undertakings in the Netherlands and abroad. It applies to companies providing workers as part of their normal business as well as those doing this incidentally. In case of a violation, both the provider and the user undertaking are liable for penalties.
 
Mandatory SNA-certification needed for placement agencies who are recognised sponsors
 
Placement agencies who wish to acquire recognised sponsor status or companies having this status who expand their activities to placement must first acquire a certificate, issued by the Foundation for the Labour Standards Register (Stichting Normering Arbeid ; SNA), confirming that it is certified according to standard NEN 4400-1 or NEN 4400-2 and registered in the Labour Standards Register. Without the proper certification, an application for recognised sponsor status will be refused and an issued status can be revoked.
 
Penalties
 
The above-mentioned requirements can be sanctioned. Typically, this will be a monetary, administrative penalty issued to the violator company, but under circumstances company officials who can be considered to have personally executed or otherwise have been responsible for a violation risk a civil penalty as well to the amount of 50% of the penalty amount. The standard penalty amounts include
 

• €8,000 for working illegally
• €1,500 for not reporting exempted work
• €1,500 for not providing an ID to a third-party employer
• €12,000 for violation of the WAADI or the WagwEU

 
These amounts apply per worker, per violation. Penalties are issued in accordance with a penalty scheme that allows the Inspectorate SZW to lower if there are mitigating factors or raise the amount in case of recidivism. Please note these penalties can also ban a company from sponsoring European Blue Cards, intra-company transfer permits or recognised sponsor status.
 
Marcel A.G. Reurs
www.everaert.nl
reurs@everaert.nl
+31 20 752 32 16
 
Marcel is a partner with Everaert Advocaten, the leading immigration law firm of the Netherlands, and co-leads the corporate immigration practice. He brings over 22 years’ experience across all immigration routes with a particular emphasis on employment-related categories. He has significant experience in handling immigration aspects of mergers and acquisitions and other corporate restructurings, compliance and cross-border service provision involving the posting of workers in the EU. Marcel is co-editor to the leading commentary on the Dutch Immigration Decree and chief editor to the Journal on Immigration Law and Jurisprudence on Immigration Law, the Dutch immigration jurisprudence series.